12 June 2012

Time for a Big Increase in Government Spending

The only debate of late seems to be whether we should cut spending now or later. I want to make the argument that we ought to instead increase government spending as a percentage of GDP.

For R&D alone we ought to increase spending.

In times when an industry is well defined, D - development - is still costly but it can usually be financed by private companies.The horizon to profits is visible, the patents will last until the technology is commercialized, and the uncertainty about development, application, and market demand is greatly reduced from the R - research - stage of the technology or market.

Yet we are at the R stage of so many markets, technologies, and products. We have the potential to extend life expectancy by decades, for example. There is so much about this that we don't know or understand. It seems wildly optimistic to think that private companies that need predictable profits would finance much in this domain and yet the potential for success in this domain is huge. This alone could justify a NASA moon landing type expenditure, but not for any one company. That is, this alone would be a vitally important justification for a surge in government spending.

Conservatives by definition want to conserve. They are not, by disposition, big on disruptions to the status quo. For this reason alone they are rarely going to invest as much money on creating the future as they do on sustaining the past. Conservatives are more likely to subsidize existing business than create new ones. Yet this is what R&D does.

There are a variety of other technologies and possibilities that have huge promise. The problem is, these technologies are so poorly defined, so unclear in timing and market potential, and offer such uncertain market value for any one company that they are lousy candidates for private investment and yet wonderful candidates for public investment.

The list of public investment possibilities include (but are by no means limited to):

Low, or no carbon energy options

Pandemic protection

Research into happiness and economic development, looking for the highest leveraged routes to happiness that may or may not involve traditional measures of prosperity but would do more to address issues like depression, anxiety, ennui, etc.

Ocean restoration programs

Social evolution and social development principles that could be used for aid in taking countries past abject poverty or even past mass consumption

Anonymous information collection, tracking, and analysis that would allow communities to protect themselves from terrorism without compromising privacy

Collision avoidance

Holograms

Robots

Mental focus

Drive or desire

Never have we lived in a time of so many uncertain but promising possibilities. This alone seems reason enough for more government spending.